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Charges of uncongested German airports: Do they follow Ramsey pricing scheme?

2014; Elsevier BV; Volume: 45; Linguagem: Inglês

10.1016/j.retrec.2014.07.008

1875-7979

Rustamdjan Hakimov, Juergen Mueller,

Aviation Industry Analysis and Trends

Abstract Ramsey pricing is considered to be a quasi-optimum pricing scheme designed for a multiproduct natural monopolist. Ramsey prices are optimal for airports with cost recovery problems, but are inefficient for busy airports. If so then it is interesting to check if current charges are close to the optimal one, and if not then why and by how much do they differ? A menu of landing fees for five German airports using a Ramsey pricing setup is calculated. The paper concentrates on fees for different distances and three types of aircrafts. A new approach of estimating marginal cost for different aircrafts is used. The calculated fees are compared with the actual fees charged by these airports. We compare the actual fees with the calculated Ramsey prices and explain the difference on the basis of different factors. We find a clear monotone dependence: Ramsey prices increase with distance and MTOW faster than the real fees, especially in the short-distance markets, but the difference between theoretical optimum and practice needs to be better understood. Based on the current calculation we suggest some policy implications both concerning our current results and the possible improvements of the regulation of uncongested airports.